Foreign investors have become aggressive shoppers of Indian equities and have invested Rs 22,452 crore in the first two weeks of August amid softening inflation concerns. This was way higher than a net investment of nearly Rs 5,000 crore by Foreign Portfolio Investors (FPIs) in the entire month of July.
The data shows that FPIs had turned net buyers for the first time in July, after nine straight months of massive net outflows, which started in October last year. Between October 2021 till June 2022, FPIs sold Rs 2.46 lakh crore in the India equity markets. Going forward, foreign fund inflow is expected to improve in the emerging markets on account of fading concerns of rising inflation and tightening of monetary policy by central banks.
According to official figures, India’s retail inflation softened to 6.71 per cent in July due to moderation in food prices but remained above the Reserve Bank’s comfort level of 6 per cent for the seventh consecutive month. US inflation slowed down from a 40-year high in June to 8.5 per cent in July on lower gasoline prices, indicating that the US Fed might be less aggressive in hiking interest rates. Brent crude futures, the global oil benchmark, is hovering around USD 98 per barrel.
According to data with depositories, FPIs infused a net amount of Rs 22,452 crore in Indian equities during August 1-12. The sentiments in the equity market have turned bullish due to sustained buying by FPIs. Certainly India is a preferred destination since the country has the best growth prospects among large economies of the world.
FPIs have turned buyers in sectors like autos, capital goods, FMCG and telecom. They continued to sell in IT. In addition, FPIs poured a net amount of Rs 1,747 crore in the debt market during the period under review.
(Additional Input from PTI)